Final answer:
The cost for a physician to use a collection agency generally works on a contingency fee basis, with fees ranging between 25% to 50% of the collected sum. Costs vary depending on the amount and age of debts, and the services provided by the agency.
Step-by-step explanation:
The cost to a physician for the services of a collection agency typically depends on a contingency fee basis. This means the agency charges a percentage of the amount they successfully collect on behalf of the physician. The percentage can vary widely, usually ranging from about 25% to 50% of the collected amount. Collection agencies may also offer flat fee services for a predetermined price, but this is less common compared to the contingency model.
Some factors that affect the cost include the volume of accounts turned over for collection, the age of the debts, and the type of services provided. It's essential for physicians to consider the balance between the cost of collections and the potential recovery of unpaid bills when deciding to engage a collection agency.